Gal repressor protein negatively regulates the expression of the gal operon of E. coli. Repression requires binding of Gal repressor to two operator sites, 0E and 0I, which are separated from each other by 114 bp and flank two promoters of the operon. Repressor binding to 0E and 0I is co-operative. However, occupation of the operators by repressor is not sufficient to achieve normal repression and requires an interaction between the two operator-bound repressor molecules. Replacement of one of the gal operators by a lac operator causes derepression of the gal operon in the presence of both Gal and Lac repressors, whereas, substitution of both operators by lac operator sequences re- establishes repression. We have proposed that the two repressor molecules bound to the spatially separated operators associate giving rise to a higher order structure containing a DNA loop with- bound repressor, CRP and RNA polymerase. The DNA in this complex is altered and inactive for transcription. The following results are consistent with our model. (1) By analyzing repressor mutants which bind to DNA but do not associate and, thereby, fail to bring about repression, we have demonstrated that repressor-repressor contact is needed for repression. (2) We have shown that repressor binding induces structural changes in DNA including DNA bending and change in circular dichrosim spectra.